Question

The following data from the just completed year are taken from the accounting records of Mason Company Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs $524,000 $ 70,000 $118,000 $140,000 $ 63,000 $ 90,000 $ 80,000 Inventories Raw materials Work in process Pinished goods Beginning Ending $ 7,000 $ 15,000 $ 10,000 $ 5,000 $ 20,000 $ 35,000 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. 2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to CC Goods Sold. 3. Prepare an income statement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. Mason Company Schedule of Cost of Goods Manufactured Direct materi Total raw materials available Raw materials used in production Total manufacturing costs

Answer 1

1) Schedule of cost of goods manufactured

Direct material used
Beginning raw material	7000
raw material purchase	118000
Raw material available for use	125000
Ending raw material	-15000
Direct material used		110000
Direct labor		70000
Manufacturing overhead applied		90000
Total manufacturing cost		270000
Beginning work in process		10000
Total cost of work in process		280000
Less: Ending work in process		-5000
Cost of goods manufactured		275000

Schedule of cost of goods sold

Beginning finished goods	20000
Cost of goods manufactured	275000
Cost of goods available for sale	295000
Ending finished goods	-35000
Unadjusted cost of goods sold	260000
Less: Over applied overhead	-10000
Adjusted cost of goods sold	250000

Income statement

Sales		524000
Cost of goods sold		250000
Gross profit		274000
Selling and administrative expense
Selling expense	140000
Administrative expense	63000
total selling and administrative expense		203000
Operating income		71000